SME Safari Newcastle: ‘It’s tough stuff’

Monthly trips to meet entrepreneurs in their real-life trading setting (hence the name SME Safari) continued this week with a visit to Newcastle. A 14 strong civil service delegation including a Director General, policy makers, and British Business Bank reps met entrepreneurs who are running businesses ranging from bowling lanes, to workspace, and provision of prison software.

Huge thanks Tim Wilks Prof. Charlie Hoult Francis Toye Jonathan Grubin for your time and honesty. Here are the key take-aways:

Make life easier

A message that was well and truly heard is that founders want less admin and more time to spend on growth. A couple of specific examples were offered; the need for energy performance certificates that are costly and not always necessary, and a regulation around security cover for premises selling alcohol that has not been revised in years despite a fall in risk and makes trading untenable after certain hours. Every time I hear points raised relating to specific regulations, I feel we need in the UK something akin to the US Office of Advocacy ie a place where business owners can ‘report’ regulations that are blockers and outdated. Work is underway within the Department for Business & Trade on reducing regulation with announcements expected on this soon.

Understand the impact

The increases to NI and the minimum wage were discussed with a reflection on the minimum wage being the same across the whole UK rather than being reflective of local economies ie the cost of living in the North East is less than, for example, in London. The impact of these changes on hiring practices was clearly not the intention and a repeated point made on Safaris has been the impact on the recruitment of young people, including the role hospitality plays in being a ‘national service’ that trains young people in skills of communication, finance, and business. That first job is critical to any young person and although all the businesses we spoke to want to employ young workers, they are no longer defaulting to only recruiting the young in entry level roles.

Recognise the risk-takers

All founders spoke honestly about the ups and downs of building a business. One has remortgaged his home, another has committed his savings, and they are after some upside that recognises the commitment. ‘If you want risk takers to build great societies, you need to give us a bit of an off-ramp’ as one of them said. These points related mainly to the tax treatment of value created in companies ie changes to Capital Gains Tax relief, taxing of employee-owned companies, and how and when EMI share options can be given.

All the founders met are on a mission to keep building and investing and what they asked for was an environment to encourage and celebrate this. Your message was well heard.

Emma